Vitter Decries Borrowing Federal Money, Building New Hospital Complex As Wasteful
With construction of the $1.2 billion Charity hospital set to begin in less than a week, Sen. David Vitter is imploring the U.S. Department of Housing and Urban Development (HUD) to reject Louisiana’s request for additional financing for the project.
The hospital will be built by the state in Mid-City, rather than in the existing Charity structure downtown, to accommodate 424 beds, a number which Vitter contends is excessive. The state government has dedicated $800 million to the project and has asked HUD to finance the remaining $400 million with sale of bonds.
Vitter’s opposition is somewhat surprising in that Republican Governor Jindal is a vigorous supporter of the new Charity hospital and has been largely responsible for brokering the deal. However, Vitter argues that the state risks running up unsustainable debt by proposing an extravagant plan beyond its means, as well as potentially putting tax payers at risk for a $400 million liability.
In a letter to HUD’s Secretary Shaun Donovan, Vitter addresses his concerns in greater detail.
“Even if the hospital’s business plan pans out, it will mean an estimated $70 to $100 million subsidy of operating costs from the state general fund and possibly as much as $400 million of new additional public debt.”
Though Vitter agrees that the need for a new Charity hospital is immediate, he nonetheless diverges from the state’s plan on several points. Is constructing an entirely new complex a more economically feasible route than renovating the existing Charity structure? Is the proposed new complex too ambitious? Most importantly, has the state fully evaluated the liability of this financing on tax payers?